Avail cenvat credit on freight outward
This query is : Resolved
26 July 2013
sir
we are manufacturing company. We are dispatching our FG on BOD( BILL ON DELIVERY)basis through TCI XPS who is registered under Courier service. We are paying service tax 12.36% to TCI XPS. Can we avail cenvat credit on service tax paid on out ward freight?
Thanking you
subrat
we are manufacturing company. We are dispatching our FG on BOD( BILL ON DELIVERY)basis through TCI XPS who is registered under Courier service. We are paying service tax 12.36% to TCI XPS. Can we avail cenvat credit on service tax paid on out ward freight?
Thanking you
subrat
26 July 2013
Yes you could do so as the delivery is at customers place. Till then the liability is with you. This is also supported by the gujrat HC decision.
27 July 2013
please give me the under which rules and section
regards
subrat
regards
subrat
15 July 2024
As of my last update, I can provide the following information regarding availing CENVAT credit on service tax paid on outward freight:
1. **Eligibility for CENVAT Credit**: According to the CENVAT Credit Rules, 2004, a manufacturer can avail CENVAT credit on the service tax paid on outward freight if certain conditions are met. These conditions generally include:
- The outward transportation service should be in relation to the clearance of final products from the factory or depot of the manufacturer to the buyer's premises or a place of removal.
- The service provider (TCI XPS, in your case) should be a provider of taxable services and should have charged service tax on the freight charges.
2. **Documentation Requirements**: To avail CENVAT credit, you need to have proper documentation such as:
- Invoice from TCI XPS clearly showing the service tax charged on outward freight.
- Proof of payment of service tax to TCI XPS.
- Records of utilization of the service (e.g., delivery challans, transport documents) to demonstrate that the freight service was used for transporting your final products to buyers.
3. **Input Service Definition**: Freight for outward transportation of goods is considered an input service under the CENVAT Credit Rules, and credit can be availed accordingly.
### Conclusion:
Given that you are dispatching finished goods on a Bill on Delivery (BOD) basis through TCI XPS, a registered courier service provider charging service tax, you should generally be eligible to avail CENVAT credit on the service tax paid on outward freight.
However, since tax laws can be complex and subject to updates, I recommend consulting with a qualified tax advisor or GST consultant who can provide specific advice based on the latest regulations and your company’s individual circumstances. They can also guide you on the proper documentation and compliance requirements to ensure you correctly avail and utilize CENVAT credit on outward freight service tax.
1. **Eligibility for CENVAT Credit**: According to the CENVAT Credit Rules, 2004, a manufacturer can avail CENVAT credit on the service tax paid on outward freight if certain conditions are met. These conditions generally include:
- The outward transportation service should be in relation to the clearance of final products from the factory or depot of the manufacturer to the buyer's premises or a place of removal.
- The service provider (TCI XPS, in your case) should be a provider of taxable services and should have charged service tax on the freight charges.
2. **Documentation Requirements**: To avail CENVAT credit, you need to have proper documentation such as:
- Invoice from TCI XPS clearly showing the service tax charged on outward freight.
- Proof of payment of service tax to TCI XPS.
- Records of utilization of the service (e.g., delivery challans, transport documents) to demonstrate that the freight service was used for transporting your final products to buyers.
3. **Input Service Definition**: Freight for outward transportation of goods is considered an input service under the CENVAT Credit Rules, and credit can be availed accordingly.
### Conclusion:
Given that you are dispatching finished goods on a Bill on Delivery (BOD) basis through TCI XPS, a registered courier service provider charging service tax, you should generally be eligible to avail CENVAT credit on the service tax paid on outward freight.
However, since tax laws can be complex and subject to updates, I recommend consulting with a qualified tax advisor or GST consultant who can provide specific advice based on the latest regulations and your company’s individual circumstances. They can also guide you on the proper documentation and compliance requirements to ensure you correctly avail and utilize CENVAT credit on outward freight service tax.
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